November 8, 2017 / 8:39 AM / a year ago

Earnings support European stocks though banks rein in gains

LONDON, Nov 8 (Reuters) - Strong company reports bolstered European shares on Wednesday though banking stocks weighed as doubts around U.S. tax reform plans dented investor sentiment in the sector, and Credit Agricole fell after reporting a fall in profits.

The pan-European STOXX 600 steadied by 0830 GMT, recovering from the previous session’s fall. Euro zone stocks and blue-chips rose 0.1 percent.

Banks were the weakest sector, down 0.7 percent and following the lead of financials on Wall Street which dipped on skepticism around a much-anticipated Republican plan to cut corporate taxes.

Also weighing was French bank Credit Agricole, which said weak trading had dented third-quarter profits, sending its shares down 4.6 percent.

Analysts have turned negative on euro zone bank earnings after upgrading expectations for much of the past year as sentiment improved over a recovering economy, according to Thomson Reuters I/B/E/S data.

Elsewhere strong earnings supported the index.

Dutch supermarket chain Ahold Delhaize rose 4.5 percent after profits beat forecasts and it struck an upbeat tone for growth in 2018.

French gaming company Ubisoft touched a fresh record high after it beat its second-quarter sales target, boosting its shares up 7.9 percent to lead gainers.

Earnings drove robust gains from German firms Symrise , Brenntag and Heidelbergcement as well.

Biggest fallers included Austrian materials firm Wienerberger and German electronic payment firm Wirecard, down 5.2 to 5.3 percent.

Overall, third-quarter earnings for MSCI Europe are expected to grow 10 percent in dollar terms, according to the latest Thomson Reuters data. This rises to 12.1 percent when looking at euro zone constituents alone.

Slightly fewer companies than average have reported estimate-beating revenues and earnings.

Reporting by Helen Reid, editing by Kit Rees

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